Vangate Mall
You are Here: News -> Minister opposed to Eskom price increase application

Minister opposed to Eskom price increase application

Return to previous page.

Minister opposed to Eskom price increase application

by BuaNews Online
23 Jun 2009
BuaNews Online
BuaNews Online

Minister of Energy Dipuo Peters is opposed to Eskom's application for she calls "a large tariff increase" as it's expected to negatively impact on the poor, especially during the current difficult economic times.


The National Energy Regulator of South Africa (NERSA) is to announce its decision this week on Eskom's application for an interim price increase of 34 percent.

"At the outset, I must state categorically that we do not agree that the tariffs must rise rapidly," said the minister, addressing the media shortly before delivering her Budget Vote in Parliament.

"It is our view that this will lead to unintended consequences; not least of which would be an adverse economic impact in the face of the recession we are experiencing," said Ms Peters.

She said Eskom's need to expand its infrastructure and subsequent request for a 34 percent tariff increase must be balanced with the need to ensure electricity is affordable to the poor.

Eskom made an application to NERSA earlier this year to increase its tariffs to cover its operations costs.

The application was made based on six principles - including enabling a thriving economy as well as having an economy that respects sustainability as well as making a contribution to the growth of the country among others.

However, the minister explained that each municipality had a different tariff structure and that they would implement the increase differently.

"During the recent NERSA hearings, municipalities had made submissions against the proposed tariff increase. They had not anticipated it," said Ms Peters.

She said government was therefore calling for a multi-year price determination structure, to "help communities anticipate what will happen in the future".

The minister said government had started a process to provide a cushion for the indigent, and would develop an appropriate pricing policy framework to structure the tariff regime such that indigent sections of our communities are insulated from increasing electricity tariffs.

"This would be over and above the Free Basic Electricity allocation, which municipalities are responsible for implementing with varying levels of success."

Eskom and government are still in talks regarding the funding model and the total requirements of the utility.

Government has set a target of having electricity in every established household by 2012.

Earlier this month, Eskom Chief Executive Officer Jacob Maroga said that if the utility was not granted a sizeable tariff increase, it was likely to place the country at risk of not having enough electricity supply.

"If we don't get the right amount of increase this year, obviously depending on the size, it means we have more risk in terms of security of supply," said Mr Maroga at the time.

NERSA will make a ruling on the matter on Thursday. - BuaNews

Return to previous page.

From our Directory

Are you craving for some divine Cape Malay Koeksisters? Simply First Distribution sells koeksisters as well as the syrup separately or added-on as requested. Call them now on 0724929919.


Salie Optometrists in Lansdowne offer eye testing, contact lenses and a wide range of spectacles. They also accept all medical aids. Call them now for an appointment on 021-7971375.


Do you need professional assistance in taxation matters? Ascend Business Solutions in Lansdowne are professional Accountants and Business Consultants with expertise in the SMME sector. Give them a call on 021-6747690



Contact Us | About athlone.co.za | Copyright | Advertising | Disclaimer

Website Design by BMSC-Online
XHTML CSS